Wednesday, September 13, 2017

British Columbia Is Considering Banning Dual Agency

  Given the frenzied real estate market that existed across much of Canada earlier this year, we have experienced market conditions and situations unlike any I have seen in the 16 years I have been a REALTOR®.  Unfortunately, this is brought out or at least served to highlight the unscrupulous activities of some REALTORS® with both Ontario and British Columbia looking to tighten the rules with respect to how REALTORS® represent clients.

  Most consumers are probably not familiar with the term dual agency.  Dual agency, multiple representation or "double ending" as it is commonly referred to is when a REALTOR®
 lists and sells the same property.  In this instance, both the buyer and the seller are being represented by the same person.  This may mean the REALTOR® earns double the commission or at least more than they would if the property was sold by someone else.  It's not hard to see where the ability to earn more money can lead to some questionable actions by a REALTOR® whose interests may be more in themselves versus their clients.

  Let's back up for a minute.  First, REALTORS® are not agents, it is the real estate brokerage that we work for that is the "agent."  As such it is the brokerage that is representing the buyer and the seller and not just the REALTOR®. 

Example 1:  If I both list and sell a property representing the seller and buyer, then the brokerage is in a dual agency or multiple representation situation as the brokerage is representing both the seller and buyer.

Example 2:  If I list a property and one of my Royal LePAGE Locations North colleagues sells the property, the brokerage is once again  in a dual agency or multiple representation situation as the brokerage is representing both the seller and buyer.

Example 3:  If another brokerage say ReMax or Century 21 has a listing and I along with one of my Royal LePAGE Locations North colleagues both have offers on that same property, once again the brokerage is again in a dual agency or multiple representation situation as the brokerage is representing more than one buyer for the same property.

  With examples 2 and 3 the distinction between who is representing the seller and the buyer is fairly clear in that two or more different REALTORS® are representing their respective parties.  It's example 1 where one person is working with and representing both the seller and the buyer.  In those instances you must walk a very straight line in order to serve both parties without any compromise or prejudice.  It shouldn't be but for some REALTORS® that appears to be difficult hence the apparent need for government intervention.

  In the legal provision, individual lawyers are not allowed to represent two clients ie: in the case of real estate seller and buyer in the same transaction.  The seller or buyer must be handed off to another lawyer in their firm.  We have implemented a somewhat similar policy at Royal LePAGE Locations North.  If one of our REALTORS® has a property listed for sale and they have their own buyer but there are other offers on the property as well, they must turn that buyer over to another REALTOR with the brokerage.   Further, typically either myself or our broker/owner will sit in on the process to make sure everyone is treated fairly and honestly.  Earlier this year I oversaw the sale of a small condo in Collingwood we had listed for sale that had 17 offers.  Obviously there were 16 buyers that lost out but at least their respective REALTORS® left the table knowing that everything had been dealt with fairly and more importantly honestly.

  The Ontario Real Estate Association and the Real Estate Council of Ontario are currently looking at making changes to Ontario's Real Estate and Business Broker's Act aimed at addressing some of the issues I have outlined above. While not a widespread problem, with well over 50,000 REALTORS®
 in Ontario, some are obviously more concerned with maximizing their commissions than they are the the level of integrity and service they bring to their clients.

  Stay tuned for further updates on this contentious issue.  In the meantime if you have any questions or need advice with respect to your particular real estate situation, please feel free to Contact Me without obligation.

  Foir more information on what British Columbia has planned see the following "BC proposes to ban dual agency."

1 comment:

crescent homes said...

nice blog I really appricate
Home Builders in Belleville will expand on the land that you possess and not very many custom developers own the land they expand on however they are the minority.

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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.